Future Implications and Current Challenges of Coronavirus
The effects of the global pandemic on supply chains across the world have introduced new challenges and shifted companies’ priorities in every industry. Not only are they focused on short term fixes to remain afloat, but they are adapting to a long-term transformation in the business.
Supply management must take action to mitigate risks, and plan for post-pandemic operations. We surveyed 115 major corporations to learn more about the actions they are taking and how they plan to move forward. High demand for personal protective equipment (PPE) and decreased source of supply from hot zones are some of the greatest challenges companies are now facing. The greatest reported challenge from our May 1 report- increasing demand of PPE - increased by 9% from our first COVID-19 survey in March, Responding to the Coronavirus Pandemic. These challenges can create more tension and shift companies into a more reactive state. Accordingly, companies are ordering larger volumes to break down for individual use and are sourcing from local, diverse suppliers.
In our latest COVID-19 report, Managing Through the Coronavirus Pandemic, 63% of companies said they had increased monitoring of supplier financial risk, finding normal operations complicated by financial pressure. Now more than ever, organizations must create clear lines of communication and understand their suppliers. With accurate insight into the vulnerabilities of each supplier, companies might need to consider supply chain financing and find alternate sources.
In addition to challenges sourcing PPE and reviewing suppliers, the majority of companies we surveyed have put a hiring freeze in place and 25% have done layoffs. This decrease in the workforce may highlight talent gaps and better prepare companies for future hires, as well as leading companies to consider new talent models, such as pushing digitization or changing personnel expectations.
In planning for post-pandemic business, there are many possibilities of what a new normal may look like. Remote work may become an expectation. Companies might consider reshoring and insourcing. Talent shortages will be more apparent, and some industries will continue to struggle. Robust planning is needed to shift to a new work environment.
The COVID-19 reports mentioned in this post are available to everyone in the CAPS Library now - simply create a free account. For more timely and relevant information on the Coronavirus pandemic, please visit our dedicated COVID-19 resource page.
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